FPIs are once again in favor of IPOs, pumping $1.3 billion into the primary market in November

ET Intelligence Group: Foreign portfolio investors (FPIs) continued to show greater interest in the domestic primary market compared to the secondary market for the fifth month in a row in November, amid a continued flurry of IPOs. They invested a net $1.3 billion (₹11,894.7 crore) in the primary market, their highest investment in four months. Moreover, they once again became net sellers in the secondary market, with outflows of $1.8 billion (₹15,659.3 crore) after buying shares worth $448.1 million in the previous month. Considering net flows in the primary and secondary markets together, FPIs were net sellers of $424 million (₹3,764.6 crore) of Indian equities in November. During the first eleven months of 2025, foreign investors were net sellers of $16.4 billion (₹1.4 lakh crore) of Indian equities, including the primary and secondary markets. FPIs have been selling aggressively in the domestic market so far in 2025, compared to an outflow of $1.7 billion (₹15,019.6 crore) in the corresponding period of the previous year. Moreover, they as a whole had become net buyers last year with a modest purchase worth $124 million (₹427 crore), driven by their focus on the primary market where they made a net investment of $14.5 billion (₹1.2 lakh crore). In the current year to date, they have invested $7.6 billion (₹66,187 crore) in the primary market, despite their large sales worth $24 billion (₹2.1 lakh crore) in the secondary market, which has far exceeded $14.3 billion in sales in all of 2024.

The domestic mutual funds continued to offset FPI outflows by increasing the size of equity investments in November. The local mutual funds bought ₹38,173.8 crore worth of shares in November through November 26. This year so far, they have invested ₹4.5 lakh crore in equities, over ₹4.3 lakh crore invested in the entire previous year.

For December, better-than-expected gross domestic product (GDP) growth, third-quarter corporate profit expectations and any progress on the US tariff front will be crucial factors for FPI fund flows. In addition, their activity is likely to be limited due to the holiday period in the second half of the month.